Gevo, Inc. and Chevron USA Inc., a subsidiary of Chevron Corporation (NYSE:CVX), have signed a letter of intent to jointly invest in building and operating one or more new facilities that would process inedible corn to produce sustainable aviation fuel, which can lower the lifecycle carbon intensity of fuels used in the aviation industry.
The new facilities would also produce proteins and corn oil, the companies said.
Through the proposed collaboration, Gevo would operate its proprietary technology to produce sustainable aviation fuel and renewable blending components for motor gasoline to lower its lifecycle carbon intensity. In addition to co-investing with Gevo in one or more projects, Chevron would have the right to offtake approximately 150 million gallons per year to market to customers.
“We are pleased to collaborate with Chevron, who is willing to co-invest in building out Gevo's capacity to produce renewable, high-performing hydrocarbons that can be used in existing equipment and engines. Chevron’s advantaged market position would allow it to offtake production from this venture, helping to place sustainable aviation fuel with airline customers,” commented Dr Patrick Gruber, chief executive officer of Gevo in a statement.
“Chevron is providing our customers with next-generation renewable fuels that can help them lower their overall carbon footprint,” added Mark Nelson, executive vice president of Downstream & Chemicals for Chevron. “This potential investment leverages Gevo’s innovative approach to producing sustainable aviation fuel, complementing other renewable fuels investments we are making as part of our higher returns, lower carbon strategy.”
The proposed investment is subject to the negotiation of definitive agreements with customary closing conditions, including regulatory approval.
Chevron is one of the world’s leading integrated energy companies. It produces crude oil and natural gas; manufactures transportation fuels, lubricants, petrochemicals and additives; and develops technologies that enhance our business and the industry. To advance a lower-carbon future, the company is also focused on cost-efficiently lowering its carbon intensity, increasing renewables and offsets, and investing in low-carbon technologies that enable commercial solutions.
Gevo’s mission is to transform renewable energy and carbon into energy-dense liquid hydrocarbons. These liquid hydrocarbons can be used for drop-in transportation fuels such as gasoline, jet fuel and diesel fuel, that when burned have potential to yield net-zero greenhouse gas emissions when measured across the full life cycle of the products.
The company uses low-carbon renewable resource-based carbohydrates as raw materials, and is in an advanced state of developing renewable electricity and renewable natural gas for use in production processes, resulting in low-carbon fuels with substantially reduced carbon intensity (the level of greenhouse gas emissions compared to standard petroleum fossil-based fuels across their life cycle).
Gevo’s products perform as well or better than traditional fossil-based fuels in infrastructure and engines, but with substantially reduced greenhouse gas emissions. In addition to addressing the problems of fuels, its technology also enables certain plastics, such as polyester, to be made with more sustainable ingredients.
The company believes that its proven, patented technology enabling the use of a variety of low-carbon sustainable feedstocks to produce price-competitive low-carbon products such as gasoline components, jet fuel and diesel fuel yields the potential to generate project and corporate returns that justify the build-out of a multi-billion-dollar business. Gevo also believes that the Argonne National Laboratory GREET model is the best available standard of scientific-based measurement for life cycle inventory (LCI).
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